Value Analysis for Cost Reduction

The product is defined in terms of its functions, in terms of its performance expectations. These functions are co-related with cost and their worth. It makes the definition pretty sharp. It introduces an element of rationality into the exercise, by trimming the frills. Some examples will make you familiar with this approach.


Tea Cup, Light Bulb, Gas Lighter, Fan Regulator, Match Box, Mirror, Brake,  Screwdriver


Holds Tea (liquid), Emits light, Provides Ignition, Regulates Speed, Provides Ignition, Reflects Light, Arrests Motion, Transfers torque

Another technique which is used under this phase is to evaluate function relationship by ranking functions in descending order of importance. Simultaneously relative value of their importance is determined.

Paired comparison method is fairly common amongst researchers. It determines numerical value of various functions. Here pairs of functions are compared to know their importance and to assess the degree of variation (major, medium, or minor).

Functions are defined for the products as a whole and for all their components. Functions are either basic or secondary. Generally a product’s basic function is one, but it may possess several secondary ones. Basic functions can be restated in more ways than one.

Creation Phase:

A survey done shows that most people use less than 5% of their creative abilities. They have hardly any time (to think?)

Most of us want previously tried out materials, designs, processes and procedures. We jump at the first ideas that work and usually do not bother to find out if better methods are possible.

These days to give a fillip to creative ideas brainstorming techniques are used. To nurture creativity, positive thinking is established. Creative ideas are also developed by a number of check-lists and idea stimulators.

Evaluation Phase:

Creative ideas generated during the above phase are screened for their feasibility, cost effectiveness and practicability at this stage. For this purpose, ideas are further refined or combined together. Cost of all ideas and savings resulting from their implementation are studied. Decision matrix can be set up to make an evaluation on the basis of various criterias.

Investigation Phase:

It is a virtual extension of the previous phase. Ideas accepted are here converted into acceptable and workable solutions to perform the desired functions at the least cost. It may be necessary to standardize, to consult vendors and specialists, and to use specialty products, processes and procedures.

Recommendation Phase:

It is the ultimate phase of VA. Finally selected value alternative here in presented for implementation on acceptance. Acceptance is the key to success of VA. Sometimes, acceptance is a result of presentation, or a combination of both. All the relevant data is kept before management to enable it to take suitable decisions.

Alternatives of Job Plan:

Instead of the above described method, we can adopt FAST or DARSARI, which is an acronym for Data Collection (D), Analysis (A), Record of Ideas (R), Speculation (S), Investigation (I), Recommendation (R) and Implementation (I). All these steps have been explained above. So let us now concentrate on FAST (Functional Analysis System Techniques) as a value engineering technique.

FAST is like a network diagram

The following steps are followed for construction of FAST:

–Use verb and noun for describing functions

–These functions are written on small cards

–First select the Basic Function card. Arrange other cards by answering the following questions:

i) How is this function performed?

ii) Why is it performed?

iii) When is it performed?

The logical sequence of functions (basic and secondary) generates a critical function path. It consists of only critical functions. FAST is bound on both ends by scope lines.

Value Engineering Job Plan

VA process is called VA job plan. Later, several approaches have emerged. Some typical steps of a job plan are:


–Problem selection




–Selection and presentation

–Implementation and follow-up

The job is divided into:

(1) General phase (2) Information phase (3) Function phase (4) Creation phase (5) Evaluation phase (6) Investigation phase and (7) Recommendation phase. Each phase has a set of techniques, carried in the work sheets. VA is to be applied for those products where cost reduction potential is substantially high. It is the general phase which acts as a frame work for other phases. The brief description of these phases follows:

The resistance is generally of the following types:

1)     We tried this couple of years ago but it was not successful. (Conditions change. Why not try again now?)

2)     It can’t be done (If it has not been tried how does one know?)

3)      The customer is satisfied with the price as it is. (If this is so he will be more satisfied and so will many others if the price is reduced).

4)     Sampling is not as accurate as 100% inspection. (This is not always true but in any case, does it need to be that accurate?)

5)     This way processing would produce too many rejects to the specification. (Then are the design limits too tight?)

6)     There is no other technique. (Have you looked for one?) People have a natural resistance to change which may be further conditioned by experience, but a favourable experience will help in reducing the resistance.

“What? Gaming in the workplace? No way!” This is something that we hear from Corporate
Closely tied to the question of how much capacity should be provided to meet forecasted
The notion of focus naturally, almost inevitably from the concept of fit. Just as a
At its heart a capacity strategy suggests how the amount and timing of capacity changes
However, as with most strategic decisions, the issue is more complex than it first appears.

  • Akksarma

    Very good writing on VA.

  • Krunal Ravalji

    nice article